Machinery Pete: Tractor Prices Fade in Fall

As the dog days of summer came to an end, tractor prices started to fall. My Machinery Pete Facebook fans noticed, commenting, “Wow, that tractor sold cheap.” In particular, these remarks were made about tractors that usually sell well above the $100,000 mark. If the unit was a high-horsepower, late-model tractor, the more the comments rolled in.

It’s no surprise, really. Cheaper corn and soybeans obviously play a part in used equipment sales.

A Sept. 8, 2014, farm estate auction in east-central Nebraska comes to mind. This sale featured a very nice John Deere 8120 tractor with only 1,365 hours. The selling bid: $99,000.

This 2007 John Deere 8430 tractor with 1,134 hours sold for $164,000 at a Sept. 6, 2014, farm auction in northeast Illinois.

For reference, at a Feb. 24, 2014, farm auction in north-central Missouri, a 2004 John Deere 8120 with 1,284 hours sold for $120,000. The record price for a John Deere 8120 is $138,000 for a 2004 model with 1,033 hours sold at a March 31, 2012, farm retirement auction in northeast Iowa.

The Nebraska auction was extensively marketed by a great auction firm I’ve known for 20 years. But as I said, the used tractor market started to soften in mid-August when prices hit the $100,000 point.

On Sept. 9, 2014, at a farm auction in north-central Iowa, this 2011 Case IH Magnum 275 with 543 hours sold for $144,000.

The trend is more pronounced on later model, larger horsepower tractors. Check out the data table at the bottom of this page. Pay particular attention to the “Date” column. See the 2010 Case IH Magnum 305 that sold for $88,500 in southeast Iowa. Look at the date: Sept. 11, 2014. Then, move down to the 2007 John Deere 8330 with 3,980 hours. It sold for $92,500 in west-central Illinois on Aug. 22, 2014.

Now, note the “Type” of auction for those two tractors. The Magnum 305 Case IH sold at a consignment auction, while the John Deere 8330 sold at a dealer auction. Wholesale auctions like these began to show softer sale prices on later model, large tractors late this summer. Again, it’s not too surprising given lower commodity prices and the excess of later model, large used equipment on dealer lots.

A drop in sale prices for later model, larger horsepower tractors wasn’t only evident at wholesale auctions (dealer, consignment and online); I also began to see softer sale prices at farm retirement and farm estate auctions. Check out the 2007 John Deere 8430 tractor with 1,134 hours that sold for $164,000 at the Sept. 6, 2014, farm auction in northeast Illinois. A couple months earlier, at a June 26, 2014, farm auction in north-central Iowa, a 2008 John Deere 8430 with 342 more hours (1,476) sold for $170,000.

You can’t generalize the used farm equipment market with one blanket statement, such as “values are falling.” Yes, in later model, larger horsepower tractors, values are getting softer, but for older model tractors in good condition, the values are holding or rising.

Need proof? I’ve seen 13 John Deere 4440s sell for $28,000 or more at auction so far this year. For example, at a Sept. 13, 2014, farm auction in east-central Nebraska, a 1982 John Deere 4440 tractor with 3,670 hours and Powershift sold for $40,000. The same auction also featured a nice 1977 John Deere 4430 with 5,718 hours and Quad-Range that sold for $26,500.